Inflationary Expectations and Price Interdependence under Floating Exchange Rates

J. Ahmad
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J. Ahmad: Concordia University

Chapter 25 in Structural Change, Economic Interdependence and World Development, 1987, pp 395-404 from Palgrave Macmillan

Abstract: Abstract Recent monetary events have cast doubt on the traditional view that floating exchange rates eliminate the international transmission of price disturbances and allow increased policy autonomy. While exchange rate flexibility in the absence of official intervention have blunted the customary channels of transmission of nominal disturbances through changes in the reserve component of the domestic monetary base, other novel but equally pervasive channels of transmission have replaced the traditional ones. These newer channels of transmission undoubtedly influence the manner and the degree of transmission, without altering the fact of price interdependence among major countries.

Keywords: Exchange Rate; Monetary Authority; Foreign Exchange Market; Exchange Rate Flexibility; Inflationary Expectation (search for similar items in EconPapers)
Date: 1987
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Persistent link: https://EconPapers.repec.org/RePEc:pal:intecp:978-1-349-09117-1_25

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DOI: 10.1007/978-1-349-09117-1_25

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